\u3000\u3 Shengda Resources Co.Ltd(000603) 799 Zhejiang Huayou Cobalt Co.Ltd(603799) )
Event: on April 22, the company released its 2021 annual report. In 2021, the company achieved a revenue of 35.317 billion yuan, a year-on-year increase of 66.69%; The net profit attributable to the parent company was 3.898 billion yuan, a year-on-year increase of 234.59%; The net profit deducted from non parent company was 3.853 billion yuan, with a year-on-year increase of 242.84%. 21q4 achieved a revenue of 12.52 billion yuan, an increase of 97.23% year-on-year and 47.26% month on month; The net profit attributable to the parent company was 1.528 billion yuan, an increase of 220% year-on-year and 70% month on month; Net profit deducted from non parent company was 1.535 billion yuan, with a year-on-year increase of 210% and a month on month increase of 70%. The company plans to distribute a cash dividend of 3 yuan (including tax) for every 10 shares and increase 3 shares for every 10 shares to all shareholders.
The volume and price of copper, cobalt and precursor products have risen simultaneously, helping the company create the best performance in history. (1) Volume: copper sales volume was 93400 metal tons, with a year-on-year increase of 19%; Cobalt sales volume was 25100 metal tons, with a year-on-year increase of 11%, of which the self supply increased significantly, from 2601 metal tons in 2020 to 5393 metal tons; The company’s self built + joint venture precursor production capacity accelerated climbing, and the precursor sales volume was 59100 physical tons in 2021, with a year-on-year increase of 77%. (2) Price: in 2021, the average selling price of cobalt products of the company was 334800 yuan / ton, with a year-on-year increase of 49.14%; The average sales price of copper products was 57500 yuan / ton, up 49.5% year-on-year; The average sales price of nickel products was 134000 yuan / ton, a year-on-year increase of 32.81%; The average sales price of ternary precursors was 97400 yuan / ton, a year-on-year increase of 28.23%. (3) Gross profit: the gross profit of cobalt products in 2021 was 105500 yuan / ton, a year-on-year increase of 123.31%; The gross profit of copper products was 28200 yuan / ton, a year-on-year increase of 63.28%; The gross profit of three yuan per ton was 14800 yuan / ton, a year-on-year increase of 31.49%; The gross profit per ton of nickel products was 18000 yuan / ton, up 45.24% year-on-year.
The integrated lithium battery material leader, which comprehensively distributes lithium cobalt nickel copper resources and extends the dual technical route of “ternary + iron lithium”, has a clear future growth route under the layout of high execution, low-cost advantages and comprehensive technical route.
1) under the high executive power, the capacity growth is determined, and the performance growth curve is steep: the company’s Huayue 60000 ton annual nickel metal hydrometallurgy project has reached production ahead of schedule in March 2022, Huake nickel has achieved ignition ahead of schedule in April, the preliminary work of Huafei project has been started, and the company’s future capacity growth is relatively determined; 2) The resource layout is perfect, and the cost advantage is gradually highlighted under the integrated layout: the copper cobalt sector of the company has become a large-scale. With the successive production of Indonesia nickel project and Arcadia lithium project, as well as the gradual implementation of Quzhou Huayou and Guangxi convertible bond projects, the company will build a deep moat in terms of cost; 3) With deep binding with downstream, the future production and sales will be guaranteed: the company has established joint ventures with LG, POSCO and other overseas leaders, and has successively reached strategic agreements with rongbai, dangsheng, Funeng and other downstream customers to lock in the sales of 6415926500 tons of ternary precursors from 2022 to 2025, with high certainty of future growth. 4) The layout of the technical route is perfect and the company is not afraid of future technological changes: the company has joined hands with Hubei Xingfa Chemicals Group Co.Ltd(600141) to build a production capacity of 500000 tons, acquired shengvanadium technology to obtain a production capacity of 10000 tons and a production capacity of 75000 tons of lithium iron phosphate under construction. The layout of the downstream battery technical route has been improved to further consolidate the future growth.
Investment suggestion: the company’s upstream resource layout is perfect, and the downstream lithium battery material production expansion is promoted smoothly. It is expected to be in large quantities quickly, and is deeply bound with international resources and automobile giants. It has high growth certainty and deep moat. We expect the net profit attributable to the parent company from 2022 to 2024 to be 6.218 billion yuan, 9.152 billion yuan and 11.781 billion yuan. Based on the closing price on April 22, 2022, PE is 14x, 10x and 8x respectively, maintaining the “recommended” rating of the company.
Risk tip: the product price has fallen sharply, and the progress of raised investment projects is less than expected and the demand is less than expected.
